Nobody Asked Me, But...

1) California is on fire again. I offer my prayers to fellow Finn and fellow blogger Cookie Jill of Skippy's place and her own Cookies In Heaven.

2) Totally Expected Item #1: Manny Ramirez of the Los Angeles Doddgers baseball team tests positive for steroids use.

3) Totally Expected Item #2: Scumbag cop Drew Peterson arrested for murder. Unexpected twist: it wasn't for Lacey's murder.

4) Not Wholly Expected, But Welcome Nonetheless News: The crown of the Statue of Liberty is to reopen to the public on a limited access basis. I climbed this as a kid. It's long, the stairs are narrow and steep, so much so that there are built in benches for people to sit on. When access was freely available, the lines could stretch all the way down the pedestal, so seats were quite welcome. The plan now is to allow 30 people an hour to climb.

5) I think the Pakistani government is starting to get it.

6) OK, I admit it. As a lifelong Trekker, I was dreading the release of this movie. But I'll probably skip Mom's Day and go see it.

7) This is a curious development for an Obama administration that worked so hard to convince us of its religious cred.

8) This is a critical element of climate assistance. Pass it now.

9) I had bet on a 10% unemployment rate by year's end. I suspect I may have framed a too-long view.

10) So young and still so beautiful. I know she's not Marilyn, but imagine if Marilyn had lived to be 60. I'm pulling for you, Farrah.

Wait. That didn't come out quite right...

The New Justice...

...is going to be Michelle Obama.

Kidding! Although that would serve the dual purposes of putting a minority woman on the bench while torquing conservatives. To boot, how many Senators would want to question in depth and with hostility the wife of the man who sits in the White House?

Another idea that is sublimely ridiculous would be to nominate Ronald Reagan Jr. You don't have to be a lawyer to be a Justice, and think about the image of The Gipper's gay liberal son sitting in front of the Judiciary Committee, while Republican Senator after Republican Senator genuflect, unable to tear down the legacy of their great icon.

But I digress:

At this moment all bets seem to be in favor of New York appeals court judge Sonia Sotomayor. She's an experienced jurist, a well regarded judge graduated from Princeton and Yale, a 54-year-old Latina, daughter of Puerto Rican parents, who rose from a life in public housing to be considered for the highest court in the nation.

The conservative fringe have already begun tagging her as a radical liberal, but that is also to be expected.

Indeed, it will be hard to tag a former prosecutor in one of the highest crime areas in the nation as "soft".

Too, her experience in private practice exploring the nuances of intellectual property will put her in good stead as this issue grows in magnitude under Web 2.0 protocols.

Further, tagging her as a liberal will be made much harder by the fact that she was named to the Federal Bench by George Bush 41. Smear her, and you smear your own party's former leader.

Too, when her "promotion" to the Court of Appeals came up, despite an anonymous hold on her nomination (almost killing it ahead of a public outcry from the Hispanic community, when the GOP was still trying to court them), six Republicans voted for her advancement who are still in the Senate today.

So the confirmation process should go smoothly. And it will be fun to see a local girl from the NYC public school system make it big.

Cut The Losses

This headline is perhaps the scariest business headline of the past six months:

May 6 (Bloomberg) -- Regulators have determined that Bank of America Corp. requires about $34 billion in new capital, the largest need among the 19 biggest U.S. banks subjected to stress tests, said a person with knowledge of the matter. Bank of America fell 9 percent in trading before U.S. exchanges opened.

Citigroup Inc.’s shortfall is more limited because the company already plans to convert government preferred shares to common stock, people familiar with the results said. JPMorgan Chase & Co. doesn’t need a deeper reserve against losses, according to people familiar with that company’s result.

The banks may outline their strategies to add capital, or in other cases buy out government stakes, after the Federal Reserve publishes the stress tests results tomorrow. Companies requiring more capital could raise all the funds through conversions of preferred shares if they choose, the people said.

Sources I've spoken to who have some limited knowledge of the results of the stress tests tell me that roughly half the banks tested will need further bailouts, but BofA is the largest eyesore on the horizon.

Mr. President, Chairman Bernanke, Secretary Geithner, the time has come for triage. Bank of America, for example, has already benefitted from bailouts to the tune of $45 billion dollars. It's clear that it cannot possibly raise another $35 billion on its own, it will rely heavily on government help.

And other banks similarly positioned will be chomping at the bit for a handout. It is time to look at a guided bankruptcy, similar to the one Chrysler filed last week and GM will likely file before long.

This will mean, in the case of BofA, writing off the $45 billion dollars. Better to take the hit now, and work out an arrangement with the new owner of Bank of America for an equity stake over a longer term than anticipated.

Bank of America is a singular case in this instance. Had it not been greedy and purchased Merrill Lynch (at the complicit urging of the Bush administration, we should point out), it likely would have survived its earlier greedy decisions to consolidate the purchases of MBNA, Fleet Bank, US Trust, and its most questionable purchase, Countrywide Financial, just ahead of the sub-prime mortgage crisis of which Countrywide was a, if not the, main player.

It's one thing when a bank gets its clothes dirty playing in the mud of securitized debt obligations and unhedged risk plays. It's another when a bank goes out of its way to collide with the earth.

Or to put it in a clearer idiom, it's one thing to get behind the wheel when you've had a beer, quite another to get behind the wheel drunk and carrying a six pack to consume on the way.

My sense is that Bank of America needs to be reorganized and then recapitalized with a different charter. Indeed, perhaps we ought to rethink the entire banking industry so that there is some safe place for the average American to put his money.

Economic Dodgeball

This is long overdue:

President Obama yesterday announced a major offensive against businesses and wealthy individuals who avoid U.S. taxes by parking cash overseas, a battle he said would be fought with new tax laws, new reporting requirements and an army of 800 new IRS agents.

During an event at the White House, Obama said his proposal would raise $210 billion over the next decade and make good on his campaign pledge to eliminate tax advantages for companies that ship jobs abroad.

"I want to see our companies remain the most competitive in the world. But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens," Obama said, flanked by Treasury Secretary Timothy F. Geithner and Internal Revenue Service Commissioner Douglas Shulman.

The nation's largest business groups immediately assailed the proposal, arguing that it would subject them to far higher taxes than their foreign competitors must pay and ultimately endanger U.S. jobs. Key Democrats were cool to the plan, and said Obama's ideas should be considered as part of a broader effort to streamline the nation's complex corporate tax code.

It's about time, says me.

The logic is very simple: if you incorporate in the largest economy on the planet and do not move your entire operation overseas (including the executive suites), then you should be subject to US tax on your income.

If you live in the United States and are a United States citizen, then you should be subject to United States tax on your income.

Period. End of discussion.

For far too long it's been way too easy for corporations and people to shelter income by offshoring it. That is, set up a foreign subsidiary (or bank account) and conduct business under that guise. You were exempt from paying tax on any of that income until you repatriated it.

Bollocks. There's a clear economic benefit from that income, even if it remains overseas, in terms of stock price and annual results. So either one of two things must happen: either that income doesn't count towards your annual results, or you owe taxes on it.

For you lay folks out there, please understand that there is little connection between a company's annual income as reported to shareholders and what it claims on taxes. This move is a major step towards what should be the ultimate goal: if you claim earnings to the public, then you owe taxes on those earnings and you should not be able to manipulate your taxable income so easily.

After all, if I tried to shelter American income offshore, I'd be hauled before a Tax Court in no time. But MicroSoft or ExxonMobil or Halliburton can pretty much with a straight face claim American income for the benefit of their shareholders and stock price, but suddenly hold out empty pockets for the tax man.

That's not right and it's not fair and must change. So kudos to President Obama for doing the right thing.

Ninety And Still Relevant

I remember the first time I heard Pete Seeger. I was a young child, and he appeared on the TeeVee. Maybe it was Ed Sullivan. Maybe it was Hullabaloo. Knowing Pete Seeger, it was likely on the news at a protest.

He turned ninety this weekend.

Pete Seeger was one of the pioneers of the protest-folk music movement. Raised by a father who was a music professor at UC Berkeley, Seeger counted among his influences Lincoln Steffens, a muckraking journalist who worked tirelessly to cover corruptions of power in America, and also was one of the first ardent American socialists.

You've heard Seeger's music all your life: "If I Had A Hammer," "Where Have All The Flowers Gone?" and "Turn, Turn, Turn" (still the only song ever lifted whole from the Bible).

Seeger sees injustice, and speaks out. He sees the tragedy of environmental degradation, and speaks out. He sees criminality from those in power, and speaks out.

And he sees dischord and strives for unity. His concerts have always featured bounties of sing-alongs, creating one voice out of many.

The list of people he has influenced is immeasurable, spanning American music from Bob Dylan, Joni Mitchell and Crosby, Stills, Nash & Young to Bruce Springsteen, Rage Against The Machine and Ani DeFranco.

I learned guitar playing his songs. I think I can still, 35 years after setting mine down, play "Where Have All The Flowers Gone?" from memory.

I say all this, because I think it's important to note a shift in American culture. With the occasional exception (Springsteen, for one), no artist today has the power that a simple man with a banjo had to shape public opinion.

Sure, you had Bob Geldof and Band-Aid. That was a one-off, tho, a moment in time when the stars aligned and the world came together to unite against a famine in a terrible cauldron of pain and suffering.

And other artists have come together regularly to promote and publicize causes, like Neil Young, John Mellencamp, and the rest for Farm Aid.

Seeger, as well as Woody Guthrie or Bob Dylan and Joan Baez and that whole gang or even John Lennon later in life, these folks could get up nightly and raise the banners of activism, and people were persuaded and went out and worked for a cause.

We don't have that attention span any longer, and I mourn a little the loss of that.